Welsh Liberal Democrats Councillor for Cwmbwrla Ward, City and County of Swansea - Visit my main website at www.peterblack.wales

Sunday, July 31, 2016

Is the Liberal Democrats triple-lock pension guarantee under threat?

We have already seen this majority Tory Government undermine or remove many of the progressive reforms brought in by the Liberal Democrats during the coalition government.

They have proceeded with the snoopers charter, are pursuing £12 billion of cuts in disabled benefits previously blocked by Nick Clegg, capped the Access to Work fund, are planning to proceed with plans to scrap the Human Rights Act, and are effectively neutralising much of our green agenda.

Now the Observer reports that the outgoing Tory pensions minister wants them to drop the triple-lock protection for state pensions so as to save billions of pounds for other causes.

Thie was a "totemic” policy introduced by Liberal Democrats Pensions Minister, Steve Webb and a major contribution by my party to improve the lot of many pensioners. Under the triple-lock guarantee, pensions have risen every year since 2010 by whichever is the higher figure, the rate of inflation, average earnings or a minimum of 2.5%.

Baroness Altmann, who left her post as pensions minister this month, told the paper that the cost of the triple-lock beyond 2020 would be “enormous”. She said the billions of pounds of spending it entailed could be better used.

Many of the pensioners who benefit from this policy are struggling to make ends meet. The coalition government made a huge difference to their standard of living by restoring the link between pensions and earnings. They also have a much higher propensity to spend that money, thus boosting the economy.

But there is still more to do and we need to retain the lock if we are to continue to tackle pensioner poverty.

Will the Tories take advantage of Labour's failure to offer an opposition to ditch this Liberal Democrats policy? Will they risk alienating the group of voters who are the most likely to go to the polling station? We will have to see.

The triple lock was a great policy when it was implemented, but it should be no more than a temporary balancing mechanism. It is levering pensions up every year compared to earnings and other benefits. At some point the effect will be to benefit pensioners to an unfair extent. When that point is reached, and whether it has in fact already been reached must be a subject of debate. Today a pensioner, in the old system gets up to £119 a week, and it goes up to £155 under the new system. This compares with a JSA claimant at £71. ESA claimants, most of who will have significant extra costs, get £109. We cannot be wedded to this policy for ever, because at some point it will be discriminating against other people, not least those whose taxes are paying for it.

The triple lock was first brought in to try to bring the UK pension up to the level of other countries in Europe. UK still lags way behind. Another point is that the pensioners have paid in to a system all their working lives in order to be able to benefit from an acceptable pension. If the government had worked along the lines of a private pension company, that money would have been invested and it would be from that fund that the pensions would be paid. It is not a matter of comparing the pension to other 'benefits', especially those given to people who have never worked and have been perfectly able to. I say that because of course there are folk who are not able to and whom we have to look after. When the triple lock brings the pension level up to that of the best in Europe, then by all means stop it.

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